The Indian stock market is poised for a weak start on Thursday, following mixed cues from global markets, as investor sentiment remain fragile amid escalating US-Iran war in the Middle East. A fresh surge in global oil prices and growing concerns over the conflict’s potential impact on global energy supplies and inflation continue to weigh on risk appetite. The trends on Gift Nifty also indicate a negative start for the Indian benchmark indices, Nifty 50 and Sensex today.
The Gift Nifty was trading around 23,884 level, a discount of nearly 104 points from the Nifty futures’ previous close.
The latest escalation in the US-Iran war has pushed up crude oil prices, intensifying concerns over inflation, central bank policy and the outlook for major oil-importing economies such as India.
“The combination of elevated oil prices and persistent pressure on the Indian rupee is likely to keep investors cautious, with market participants expected to closely monitor geopolitical developments and energy markets for further direction,” said Ponmudi R, CEO of Enrich Money.
Global markets cues remain mixed, as Asian markets rallied, while the US stock market ended lower overnight.
Investors will focus on the European Central Bank’s policy decision and the latest US weekly jobless claims data for fresh clues on the global interest-rate outlook and the strength of the US economy.
“With the ECB decision, elevated crude oil prices, and market reactions to Alphabet and Tesla’s earnings all in focus, investors are likely to remain selective through the session,” added Ponmudi R.
Here’s global equity heatmap to know before the Indian stock market opens today.
Asian Markets
Asian markets traded higher on Thursday, supported by a rally in semiconductor and technology shares. Japan’s Nikkei 225 gained 0.73% and the Topix rose 0.43%. South Korea’s Kospi rallied 3.04%, while the Kosdaq surged 1.44%. Hang Seng index was 0.76% higher, while mainland China’s CSI 300 opened flat.
“Sentiment, however, grew more cautious as the session progressed. Alphabet’s sharp increase in planned AI investment and Tesla’s earnings miss weighed on risk appetite, while elevated crude oil prices, which remain near six-week highs amid the Iran conflict, added another layer of uncertainty across the region,” said Ponmudi R.
US Markets
US stock market ended lower on Wednesday, as investors waited for key earnings reports, while rising oil prices kept risk appetite in check.
The Dow Jones Industrial Average fell 6.06 points, or 0.01%, to 52,218.58, while the S&P 500 declined 10.24 points, or 0.14%, to 7,498.96. The Nasdaq Composite closed 146.30 points, or 0.57%, lower at 25,690.90.
European Markets
European markets recovered from early losses to close higher on Wednesday, with the pan-European STOXX 600 gaining 0.58%. London’s FTSE 100 climbed 1.24%, Germany’s DAX added 0.58%, and France’s CAC 40 rose 0.89%.
“Attention now turns to the European Central Bank’s interest-rate decision later today. Markets broadly expect policymakers to leave rates unchanged, with investors focused on President Christine Lagarde’s guidance and any signals regarding a possible move in September,” said the Enrich Money CEO.
Indian Market Outlook
Nifty 50 is expected to trade with a cautious bias as the index continues to hover near the 24,000 psychological mark after recent weakness.
“The 23,800 – 23,850 zone is the immediate support to watch, with a break below this range potentially opening the way for a retest of recent lows. On the upside, the Nifty 50 index needs to reclaim and sustain above 24,000 for momentum to improve, with resistance seen near 24,150 – 24,200,” said Ponmudi R.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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